IMF Pushes To Replace Dollar As Reserve Currency
I fear the writing is on the wall for the greenback.
It’s days as the world’s reserve currency appear to be numbered.
From Retuers’ Simon Rabinovitch and Alan Wheatley this past Tuesday:
The imperative of greater global currency stability means the world can no longer rely, as it has done since the end of the gold standard, on a currency issued by a single country, the head of the IMF said on Tuesday.
Dominique Strauss-Kahn, the managing director of the International Monetary Fund, restated his view that a new global currency might evolve out of the Special Drawing Right, the Fund’s in-house unit of account.
“That probably has to be a basket,” Strauss-Kahn said of the eventual replacement for the dollar. “In a globalised world there is no domestic solution,” he told a forum….
Buy gold online – quickly, safely and at low prices
Support for retiring the dollar was echoed by others. From the piece:
A former IMF chief, Michel Camdessus, said time was of the essence to embark on reform of the global monetary system.
“This favourable window of opportunity is there. It will not stay open forever,” he told the forum at which Strauss-Kahn spoke.
Camdessus gave broad backing to a recent proposal by Chinese central bank governor Zhou Xiaochuan that an expanded SDR could eventually replace the dollar as the global reserve currency.
“Our Chinese friends mean business,” he said of Zhou’s plan.
As a corollary of a strengthened role for the SDR, governance changes were needed at the Fund to shift power to big emerging economies, Camdessus said.
To that end, the SDR basket must be modified to include the yuan and perhaps the Indian rupee and Brazilian real as well.
“The RMB must be there. Period,” Camdessus said.
Source:
“‘Basket’ should replace U.S. dollar as reserve currency, IMF says”
Simon Rabinovitch, Alan Wheatley
Reuters, November 17, 2009
Leave a Reply